Growing Our Discipleship
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Growing Our Discipleship ANNUAL REPORT FOR FISCAL YEAR 2016 JULY 1, 2015-JUNE 30, 2016 Overview Welcome from Archbishop Lori 1 Vision and Mission 2 Letter from Foundation President 3 Financials Year in Review 4 Investment Review 5 Performance Review 6 Selected Financial Information 7 Endowments Growing Our Discipleship 9 New Endowment Funds 12 Endowment Funds by Purpose 13 Donor Advised Funds 25 Legacy League 26 About the Foundation Foundation Leadership 29 Contact Us 31 Our Legacy 32 Dear Friends in Christ, In the summer of 2015, I issued my first pastoral letter as Archbishop of Baltimore, A Light Brightly Visible, Lighting the Path to Missionary Discipleship. In it, I asked the people of our Archdiocese to enter into a deeper relationship with Christ, to be not merely His disciples but His missionary disciples, extending the light of the Gospel to others among us so that they, too, could fully welcome His Word into their hearts. The Catholic Community Foundation is uniquely positioned to aid this evangelization effort for years to come. “Through their endowed giving, Foundation contributors are helping to foster a culture of Catholic growth and renewal.” Established in 1998 by my predecessor, Cardinal William H. Keeler, the Catholic Community Foundation has grown to over 470 separate funds, each with its own unique purpose and benefit. Not only are our parishes well-represented and supported by the Foundation, so too are our Catholic schools, clergy, religious and a host of ministries that are critically integral to carrying out the Church’s evangelizing work. Indeed, through their endowed giving, Foundation contributors are helping to foster a culture of Catholic growth and renewal. As we plan for the future of our Archdiocese and its mission readiness – our current parish planning process being a prime example– endowments in the Catholic Community Foundation will provide crucial streams of financial support. I would like to take this opportunity to thank John Balch, for his years of service as Foundation President, and also the women and men who serve on the Foundation’s Board of Trustees and committees. Your gifts of time and your wise counsel have proven invaluable as together we have sought to ensure that the good works of the Church will continue for countless generations to come. My sincerest thanks, as well, to all of you who have provided financial support to the Foundation. Your donations are a welcome witness to your personal encounter with the Lord and a testament to the impact the Church has had on your own life. With grateful prayers for you and your loved ones, I am Faithfully in Christ, Most Reverend William E. Lori Archbishop of Baltimore ANNUAL REPORT FOR FISCAL YEAR 2016 1 OverviewVision+Mission Our Vision To build a dynamic force of Catholic philanthropy within the Archdiocese of Baltimore by inviting major endowment gifts, bequests, charitable gift annuities, trusts, and other legacy gifts from the people of God served by the Church throughout their lives. Our Mission The Catholic Community Foundation exists to provide financial support to secure the future of parishes, schools, and ministries of the Archdiocese of Baltimore. 2 CATHOLIC COMMUNITY FOUNDATION Dear Friends, I am pleased to present you with Growing Our Discipleship, the Catholic Community Foundation’s Annual Report for Fiscal Year 2016 (July 1, 2015 – June 30, 2016). For FY16, the Catholic Community Foundation increased its assets held under management to $57.62 million, representing an increase of over $9 million from the prior fiscal year. Moreover, due to the generosity of Foundation fund holders and our long-term fiscal performance, the Foundation was able to make distributions of over $1.3 million during the fiscal year in support of archdiocesan parishes, schools, and ministries. Impacted by challenging market conditions in FY16, the Foundation saw an investment performance of -1.99%. Though unfavorable, this downturn still outperformed our benchmark by 0.12%, and, as the Foundation’s rate-of-return rate since inception stands at 8.86% vs. a benchmark of 8.18%, we are guardedly optimistic regarding performance going forward. “The Foundation was able to make distributions of over $1.3 million during the fiscal year in support of archdiocesan parishes, schools, and ministries.” Further offsetting this downturn, the Catholic Community Foundation added 22 new funds in the fiscal year with a variety of purposes: providing tuition assistance to our Catholic schools; facilitating faith formation for our children and youth; offering our Deacons the financial support to explore advanced coursework in Theology; and subsidizing the faithful maintenance of parish cemeteries. I warmly invite you to review our report’s feature story, Growing Our Discipleship, which appears later in these pages and which profiles two of these funds and the goals of their benefactors in establishing them. This report will also serve to introduce you to some new design elements for the Foundation, including a new logo and tag line. These are the beginnings of an effort begun in FY16 to increase Foundation awareness among our archdiocesan community, a community I am grateful to serve through my role as Foundation President. My gratitude extends as well to Archbishop Lori for his commitment and hands-on approach to the Foundation, and to all who have given their time and talent in serving on the Foundation’s Board of Trustees and committees. It is an honor to work alongside you as we strive to map the best path forward. If you would like more information on the Catholic Community Foundation or on how endowed giving through the Foundation can help you realize your philanthropic goals, I urge you to reach out to us by way of the contact information found in the back of this report. I also ask you to share this information with those you know who are considering endowed giving. Together, we can secure a thriving future for the mission of our Church. John H. Balch President, Catholic Community Foundation ANNUAL REPORT FOR FISCAL YEAR 2016 3 FINANCIALS Year in Review For Fiscal Year 2016, the Catholic Community Foundation’s assets held under management grew by over $9 million to a balance of $57.62 million. Our inception-to-date return of 8.9% remains strong, and cautious optimism is still the belief for future performance. However, due to the challenging market conditions, As of June 30, the Foundation did experience an investment performance of -1.99% for the year. 2016, assets were As of June 30, 2016, assets were at $57,619,325: 55.9% in equities (global), 17.2% at $57,619,325: in fixed income, 16.6% in alternatives, and 10.3% in real assets. Moreover, since the Foundation’s inception, the portfolio’s return has been 8.86% versus the policy 55.9% in equities benchmark of 8.18%. (global), 17.2% in The portfolio return of -1.99% in Fiscal Year 2016 outperformed its policy benchmark by 0.12%. The negative absolute return was driven by exposure to fixed income, 16.6% non-U.S. stocks as the developed international and emerging markets stock in alternatives, and indices returned -10.2% and -12.0%, respectively. The outperformance vs. the benchmark stemmed from investments in private equity and venture capital, 10.3% in real assets. which are reported on a quarterly lag and returned 13.7%. Further, the portfolio’s Moreover, since hedge fund allocation outperformed its benchmark and provided downside protection in a negative environment for global stocks. Partially offsetting the the Foundation’s positive performers was the negative relative performance of the liquid global inception, the equity portfolio. The fund’s managers were broadly underweight in high-dividend yielding sectors, particularly utilities which was the top performing sector in portfolio’s return the S&P 500 (+26.7% return), as investors pursued bond yield substitutes in an has been 8.86% ongoing low interest rate environment. versus the policy Fiscal Year 2016 saw another healthy influx of new endowment funds established within the Foundation as 22 individual and organizational donors set up funds benchmark of 8.18%. for tuition assistance, youth ministry, cemetery preservation, and other religious purposes. In the following four pages, we present the Foundation’s Investment and Performance Review as of June 30, 2016, along with the Selected Financial Information for the fiscal years ending June 30, 2016 and June 30, 2015. For questions about any of the information provided within this section, please contact Robert Barron, Senior Financial Analyst for the Foundation, at [email protected] or 410-547-5323. 4 CATHOLIC COMMUNITY FOUNDATION FINANCIALS Investment Review Equity 55.9% 53% Fixed 17.2% ACTUAL PORTFOLIO INVESTMENT Income 15% RECOMMENDED POLICY Alternatives 16.6% 16% Endowment Real 10.3% Assets Market Values 16% ANNUAL 2013-2016 Jun 2016 $ 57,619,325 Jun 2015 $ 48,342,777 Jun 2014 $ 46,749,357 Investment Allocation Jun 2013 $ 40,023,917 Global Equity 54.5% Private Capital 2.5% Cash 2% Core Bonds 9.6% Global Bonds 1.5% Short-Dated High Coupon Mortgages 4.2% Hedge Fund 15.9% Commodities 1.6% TIPS 0.9% Natural Resources 4% Real Estate 3.3% ANNUAL REPORT FOR FISCAL YEAR 2016 5 FINANCIALS Performance Review Annualized Performance ANNUALIZED POLICY PERFORMANCE FOUNDATION BENCHMARK1 CPI + 4.25% QTD 1.04 2.08 1.67 1 Year -1.99 -2.11 4.95 3 Years 4.50 4.14 5.14 5 Years 4.93 5.12 5.46 Inception 8.86 8.18 5.90 Cumulative Performance (Growth of $100) $250 $200 $150 $100 Foundation $189 $50 Policy Benchmark1 $180 $0 DEC 12 JUN 13 DEC 13 JUN 14 DEC 14 JUN 15 DEC 15 JUN 16 Annualized Return Policy Benchmark1 Jan-09 to Mar-12: S&P 65%, FOUNDATION Barclays U.S.